Study: Proposed Boiler MACT means significant job loss

By Lisa Gibson

Posted September 16, 2010, at 9:37 a.m. CST

A study commissioned by the Council of Industrial Boiler Owners found that implementation of the U.S. EPA's proposed Boiler MACT rule as is would result in substantial job loss, as well as reduced U.S. gross domestic product.

The rule would strictly limit emissions of five hazardous air pollutants (HAPS)-mercury, hydrogen chloride, particulate matter, carbon monoxide and dioxin/furans-for industrial, commercial and institutional incinerators, boilers and process heaters, including those using biomass. Under the proposed rule, sources emitting 10 MMBtu per hour and greater will be required to comply with numerical emission limits for those pollutants. In addition, many biomass boilers formerly categorized as multifuel boilers would fall under the incinerators category and would be subject to the emissions limits.

The new CIBO study, The Economic Impact of Proposed EPA Boiler/Process Heater MACT Rule on Industrial, Commercial, and Institutional Boiler and Process Heater Operators, found that for every $1 billion spent on MACT upgrade and compliance costs, 16,000 jobs will be put at risk and the GDP could be reduced by as much as $1.2 billion. Much of that pain would be suffered in supplier networks, it adds. Biomass Power Association president and CEO Bob Cleaves has been warning of the monetary expense and job loss dangers of the proposed rule since its release in June, saying it would require costly retrofits at almost 100 percent of existing biomass power plants. "The Biomass Power Association has repeatedly emphasized that the EPA's proposed MACT ruling will cause the loss of thousands of jobs across America in an already troubled economy," Cleaves said. "The Council of Industrial Boiler Owners is buttressing our views with its report on the potential effect of the MACT rule on jobs. We ask again that the EPA review its proposed ruling on biomass boiler emissions to consider what is at stake environmentally and economically for Americans."

Cleaves has charged that the limits are unachievable and would devastate the biomass industry. According to the CIBO study, biomass won't be the only industry hit. "The Council of Industrial Boiler Operators believes its members may be subject to significant economic hardship should the proposed EPA rules regulating boiler emissions be adopted," it reads. "Potential consequences include the shuttering of domestic manufacturing capacity-and the associated jobs losses-for those CIBO members that find the capital costs associated with compliance via plant retrofitting make it economically unfeasible to continue operations."

The study was conducted by economic forecasting firm IHS Global Insight and quantifies the economic impact of compliance to the proposed standards by all impacted sources. Upgrade costs alone for all the proposed standards would cost the country more than 337,000 jobs, the study forecast, and $5.7 billion in taxes.

"The study released today (Sept. 15) by CIBO is but further evidence that excessive regulation would result in lost jobs-and those jobs won't come back," said American Forest & Paper Association CEO Donna Harman, adding that AF&PA commissioned its own study released in August that also showed significant job loss forecasts. "The CIBO study, much like the jobs impact study AF&PA released, shows disturbing job losses that can still be avoided as the rule is being considered by EPA." The comment period on the proposed MACT rule ended Sept. 14 and the rule should be finalized by Dec. 16 of this year.

"Policymakers are rightly saying that we need to preserve and create more American manufacturing jobs today," Harman said. "This proposed Boiler MACT rule overshoots the mark and would result in Americans being put out of work. EPA has a choice-they can regulate in a way that protects both jobs and the environment, or they can regulate in a way that sacrifices jobs."